$1.6 Trillion AUM Franklin Templeton is all in on Crypto, Tokenization, & Stablecoins!

And so this is all on kind of the investing side of the house and then on the building side of the house. You know, it really started with that tokenized money market fond. And yeah, so the term benji relates to, you know, one Benji token is one share of ownership in this money market fond that that's on chain and fully on chain, No, no duplicate.

This content is brought to you by v chain, which is a leading enterprise grade Layer one public blockchain spear hitting a digital revolution from a sustainable, highly scalable smart contract platform. The v chain blockchain has many unique features, which makes it an ideal choice for Web three applications. V chain is working with many great enterprises such as PwC, G,

I'm a big.

Believer in this project. I have been since twenty eighteen. I've been a VET token holder for years. And this blockchain is highly scalable, great with security and speed, and it has low energy consumption. If you'd like to learn more about v chain, please visit vchain dot org. Link will be in a description. Hey, folks, welcome into the Thinking Crypto podcast. I'm your host, Tony Edward, and joining me today is Christopher Jensen, who is the director of

You, Thanks Tony. Happy to be here.

Yeah, Christopher, I'm excited to speak with you. Franklin Templeton is certainly a power player and on Wall Street, and you've launched some very interesting digital asset tools, products, services and much more, and I want to dive into that. Let's kick it off with your background. Tell us a

Yeah, thank you.

So, I guess, like several both my firm and across some of our peers, you know, I do have a Tratify background, so you know, always been involved on the byside principal investing for about twenty years now, a lot of that in credit private credit, you know in particular, and then for the last probably eight really at this technic intersection of technology and finance, and so you know, we were doing a lot of the early fintech activities for the firm for Franklin and you know, I think

Interesting aha moment. And you know, once you once you get kind of get crypto pilled, right, you know, it was, uh the rest is history. Yeah. Absolutely.

Now, with your plethora of experience in the trad fire

Yeah, definitely, I'm kind of in the camp that it's both an evolution and upgrade to the Internet. I love that phrase that, Like one of the original sense of the of the Internet, right is that it didn't have the ability to send money. You know, you can send an email anywhere in the world permissionlessly, but you know, you can't do that with money. And I think at the time it was too hard of a you know, computer science problem, the double spending problem.

And but you know, since.

Then, with cryptography and blockchains, we've we've figured that out, right, So I do think, you know, it's an upgrade to the Internet, and I always get a shout out to you know, a Christison's Read write own and that kind of mental model.

I think that's that's wonderful.

Uh, as well as though an upgrade to our financial system, and so obviously a Frankel Tembleton. You know, we've kind of been sitting at the at the nexus of this, you know, having over eighty years kind of you know doing investment management, asset management on a global scale, and so that that involves lots of ledgers, lots of you know, middle ops and backups, and and dealing with lots of different ways to move money and value around the world and with respect to clients and assets.

Uh.

And so I think when we saw blockchain technology, right, it really was an AHA moment on the financial system upgrade side just as much as it was on the internet upgrade side.

Yeah.

Absolutely, So maybe you could take us behind the curtain

Yeah, definitely.

So the order of the story there, and I can't remember if my colleague Sandy call had gone into I'll touch on it briefly, but you know, be coming out of that kind of fintech roots, you know, for us, we originally were running a validator on the Provedance blockchain right, which it tazes back to, you know, kind of figure and Mike Cagney, who was the founder of Lending Club

You know, it's on our balance sheet? What what is it worth?

And and so once once you kind of you know, start pulling on that threat a little bit, a whole host of questions opens up. And so, you know, I think initially it was the combination of you know, necessity, we have to figure out how to what this is and how to value you know, value it as well as you know, then you know, what can we do

And like is it a threat or is it an opportunity or is it both and so?

And then we also recognized that, hey, you have this totally nascent, you know, the buddings of what could be an acid class, and you know, fast forward today and it really does seem like a legitimate its own acid class. At the time, it was just like, hey, maybe it could, you know. And so I think from inception, there were these two sides to our business. It was a curiosity to what can this technology do? And then a curiosity to of, hey, if this involve evolves into like a

And then and then you know, I'll kick it back to you.

We can talk about, you know, how we kind of evolved the ball or advanced the ball and I are those two initiatives.

Yeah, it's it's so fascinating because it seems, to your point, we couldn't tell what this was initially, right, Is it just blockchain and just rails? Or is also an asset class?

Yeah, definitely, I remember us having some early conversations around that that very topic and actually publishing some research around our thoughts on you know, public blockchains and this this sort of thing. I think, you know, giving a lot of credit to our own in house blockchain engineers, and you know, just kind of big fans of open source software and the importance of that and prior technological movements.

I don't know if you can speak to this because

I don't know if that makes sense, but yeah, it totally does.

And I think from that investor mindset, which is really like, you know, first and foremost, you know, I'm an investor, we.

Have all the buildings on our side of the platform.

You know, that's not me. I'm more of the you know, investing mindset. So when I'm looking at like this technology or any one of these protocols, like I'm constantly asking, like, what really is the value proposition here? And to your point, is the technology here cost savings exercise or is there something new that can be done with it, you know, in terms of enhance you or an additional revenue line. You know, So is that value proposition strictly on the cost side or is it also on this you know,

And again, you know, we have.

Funds and you know, stakeholders all over the world, right, so there's a lot of there's a lot of kind of you know, leakage in the global financial system, and certainly as being a player, like you know, we know this all too well.

So there was a little bit of a light bulb going off there.

But at the same time, you know, not only by bringing something like a tokenized money market fund on chain and realizing those those costs, we realize that, you know, blockchains afford new use cases and this idea of programmable composable money allows you to just do things that you

Yeah, absolutely, And to your point of new revenue lines, does it open up more liquidity to come into certain funds and products that you have because it's on the blockchain, it's trading twenty four to seven and for the first time, we can have truly global markets because let's say, I know, certain legislations being figured out, you know how we're going to handle all these things with global markets twenty four

Yeah.

I love those examples, right because you are democratizing access. And I think one theme right now is you know, democratize and say alternatives.

But here we're just talking.

About you know, with us with a smartphone and an Internet connection, you can have access to basic banking you know that you wouldn't have in those parts of the world. So it really is you know, powerful and as we think of, you know, kind of where the where the

Yeah, and you know, I think a lot about that, the idea of the wallet replacing maybe some of the legacy things that we have with account numbers, and you know exactly what Sandy said, and then that wallet being interoppable with my devices, my car and it's so it's like anywhere I go it's sharing pulling from the same wallet. I paid a toll and driving on the highway. U my fridge does something right, all these little updates that are done and it's coming seating from the same wallet.

Yeah, definitely. I think you know, since this industry kind of got started, people were imagining what could the actual total addressable market be for blockchain technology, and I think, you know, whatever those wild estimates were at the beginning, like you start to realize that, yeah, you could actually provide a digital signature, you know, not just for for assets, but there are financial assets, but for for capital assets,

Yeah, you know, some of it seems like things some of the movies and you know, how everything will be connected IoT a crypto blockchain. It seems we're at the well, I've been talking about it a lot, Fourth Industrial Revolution. You have the convergence of all these technologies and they compliment each other and uh, you know, I was just interviewing someone who's working on robots and AI and they're looking to integrate blockchain, and yeah, robots are not gonna use cash.

You know.

If we're gonna have robots in our homes or in the factories ten years from now, they're gonna probably have a built in wallet and use stable coins or some digital money.

Yeah, and especially I mean robots, I think I think it's something physical tangible. But even as agents, you know, working on your behalf online right, Absolutely, I doubt we're going to see a siation you know, fun fun wires around. It's it's probably you know, micro payments, you know, riding around on blockchain rails.

So I think that is the way it's added.

Absolutely, Before we go further, I want folks to know as much as possible what Franklin Temple is doing with crypto, blockchain and so forth. Can you run through all the

Yeah, definitely.

I'll start on the investment side of the house and then we'll get to the building side of the house in case you want to a double click on any of that. So look on the on the investing side, I think you know, we're our kind of mindset or our philosophy is is, you know, how do you develop kind of a full menu, right to offer exposure to this underlying technology. So, you know, we're one of the ETF players, and we're really excited about, like, you know,

Them out to clients. Right.

Uh, So that's exciting. I think we'll see a lot more there. And then we think of that too as like a form of low cost beta, right. I mean, there's just so many good things about ets but as you get your toes, you know, you different toes in sometimes you want you know, act management and something more discretionary.

And so there we kind of are thinking.

About the world in terms of okay, there's venture capital on the one side, and then you have you know, active management to figure out that whole tale of the long tail of kind of crypto assets, you know, the tokens.

So we have kind of private.

Funds and those offerings, and so this is all on kind of the investing side of the house and then on the building side of the house. You know, it really started with that token iszed money market fund, and yeah, so the front the term benji relates to, you know, one Benji token is one share of ownership in this money market fund that that's on chain and fully on chain. No, no duplicate you know, books and records off chain.

It's it's it's fully on chain.

And so I think it you know, it started with that and really on one blockchain, one product, you know, and so I guess kind of fast forward, and you couldn't do much with it. It was really like you know, it was it was fiat currency going in and you can buy it and you could hold it, right, And so you know where we've kind of come from there is is expanding the number of blockchains that we're on, so kind of meeting the client where they're at.

And so yeah, I think we're on you know.

Called it eight eight plus you know blockchains right now, public blockchains, uh, and and then increasing the functionality so that concept of inter day yield, then the concept of being able to transfer this security token back and forth between us. You know, these are things that we're added later, like the ability to go to swap you know, your stable coins into into Benji rather than just use you know, go Fiat into it. So I think we're trying to

So it was this interesting, you.

Know, how do you bring this to more places on chain and how do you bring it to more places around the world, and all while doing it in a regulatory compliant way. So I think a lot of the effort has been creating those pathways from a technological standpoint

That the use case that Benji's also evolved. It originally was.

Kind of more used for treasury management, for for you know, crypto firms for instance, dows and protocols, that sort of thing. It was used as as some some payments, and now it's really seen a lot of use as as collateral.

Uh.

And so that's kind of an exciting use case that that's that's evolved, right, So, you know, excited with where that's headed. And I think the idea, the broader idea of this, you know, tokenization of real world assets putting them on chain, that is the opposite of the etfisation of the crypt of native assets and bringing that off chain, right, So we think we think we're coming at it from both sides and and and that whole space will just continue to kind of evolve in and be pretty interesting.

Oh for sure.

You mentioned there's about eight to ten blockchains that you've launched. They took a nice fund on how what goes through the process of selecting a blockchain? Are you looking at security, liquidity, the amount of users and activity and things like that.

Yeah, I say that's a great question because it really highlights kind of the synergy between different parts of our digital assets platform. So you know, on the one hand, you have the pure you know kind of technology like any any web three founders thinking about what you should

And then there's the you know, well, where are where are the users?

You know, where's where's the capital that actually desires you know, an on chain money market fund, and and what's the growth of these various ecosystems and so, you know, on the on the investment side, we're trying to figure out, you know, you know, which of these protocols are gaining market share or losing market share?

What are those native coins worth? You know, so we're looking.

At you know, user cohorts and retention and fee activity and you know all of that, right. And then on the building side, you know, you know, they're and we're doing this kind of in conjunction. They're going through smart contract audits and and and talking to developers and that sort of thing, and so we kind of come together to really talk about, you know, where where should we go next? Right, And a lot of the work that we do on the investment side helps inform that process and and vice versa.

And then I'm sure there's some similarities to the ETF

Yeah, definitely, it's it is quite so similar.

And there we get a further collaboration between you know, our our kind of traditional ETF colleagues and the digital assets team. So, you know, I think the whole launch of the ETF was was such an amazing kind of collaboration right between tradify and kind of DeFi and I think as as people are thinking through, you know, how do you do some of these ETFs as a staked version.

Also have easyps.

It's it's uh, it does kind of a market cap weight of the two of them in the ideas is more get approved, Right, this thing could evolve and start to look like almost like an index fund, you know of crypto.

You know, in the early days of crypto, and I considered myself an early adopter, the way to get access to this acid class was simply going to coinbase or some exchange, buying the asset, uh keeping it on coin based or putting on a hardware wallet.

Right.

But now with these ETF products, do you belie if these will become the biggest on ramps given that there's already an infrastructure in TRADFI, retirement accounts and all these things. Uh R I A S and both managers are gonna say they're not gonna buy it directly for the climb or go through the ETF route. Do you think the ETF has become the biggest on ramp for this asset class.

Yeah, I think they become one of the big ones.

But you know, it's so fascinating because I think there are like pros and cons to all these different rappers, right, and so while someone I mean, you have to you have to choose one first, right, And so you know, I know plenty of people as I'm sure you do. You know, they they first came into this, you know, through kind of self custody or through or through a centralized exchange or but but now they're coming in, you know,

My my keys or not? Am I okay? You know?

So am I really okay with self custody? Or am I okay? Having someone help me with that?

You know?

With ETF's kind of easier to you know, write covered calls. I mean, there's there's just so many different kind of nuances to all these different you know, kind of rappers and having that that crypto exposure sitting next to my my traditional assets, you know again because we're still in that account view world, not fully in the wall at view world yet, but uh.

Heading there right.

So I think I think there's pros and cons of all these different you know kind of avenues channels.

Yeah, for sure. And then the second question was you mentioned the index and right now just bitcoin and ether, but as the other all coin ETFs get approved, we can see those assets get added to the index ETF and what we've seen in the for a long time, you know, the index have performed better or they're larger than the individual socks, so you can get exposure to

Yeah, they they certainly could, I think, Uh, you know, it'll be interesting to see because unlike a company that can say, you know, go bankrupt, you know, a protocol and it's market cab. It can it can hang out around right through cycles and maybe maybe there's some you know, market cap erosion to some of its competitors, but it can still have a decent valuation for for quite a while.

Yeah, it definitely feels like institutions are leading the charge this time around, not to say, retail is not involved, and I believe retail is going to be coming I think soon as this market heats up into the fall. But it feels like institutions are leading the charge here and it's like they they've had that moment at Aha moment and they're all going in obviously, just like Franklin Templeton launching ETFs building.

Uh. It's exciting to watch that play out.

So I guess a good question or good segue is

What does that mean for Franklin Templeton.

Yeah, so I think that's huge because well, you know, I mean look, first time lawmakers took carbon a week out to really kind of focus on crypto legislation. I mean that that's amazing and to get you know, the progress that was made, you know, kind of across the bills, but especially a Genius Act and signed into law and really having that regulatory framework for for stable coins in particular,

Right.

So, but having that framework, I think it's just huge because now you know, infrastructure providers, you know, can can really kind of embrace this and innovate and iterate on different kind of what you can do with this, and they don't have to worry about you know, kind of regulation by enforcement.

Right, we have clear rules.

Well what's interesting though is is we don't have rules yet for the rails that these stable coins travel on, right, So obviously that's coming next. So while while genius was tremendous, you know, I think it is tip of the iceberg. Obviously there's more coming and hopefully this is just a trend that will continue in a tailwind that will really kind of continue for the industry.

I don't know if you can answer this, but I

You know, I think in general we're going to see I mean, the banks are clearly say I think we're gonna see like lots of different types of firms, uh, you know, launch their own stable coin and they'll be almost like, you know, a brand connected to it. I think the key though, right is obviously there has to

But that's something I'll be curious.

To follow and track, and I guess we'll see how it progresses.

Yeah, because it's to your point, just launching a stable coin without the distribution and a proper network. It's not And I think of like Circle, you know, partnering with coin base, that strategic partnership and Coinbase helped with the distribution of USDC. I think that really helped u SEC. But uh, yeah, we'll see. It looks like everybody in their grandma is going to launch a stable coin and there might need to be some consolidation at some point.

Yeah, definitely, And I think obviously there's some some fine printing around that, you know, not not everybody can launch a stable coin, but I think we're gonna see, you know, white label solutions and other things. I do think it's gonna be an interesting kind of trend to to follow who was actually launching, you know, who's helping with the building that out and then how is that all connecting to.

Form little liquidity and the integrations to really kind of get the flybell going. M hm.

You know you mentioned the market structure Bill right, you alluded to it, the Clarity Act that is set to pass in September. Knock on board. Hopefully that gets done Congress pushes it through President Trump sized into a law. Do you think that's just gonna unlock incredible innovation and building in this technology and industry because once again no regulation by Unfortunately you don't have to look over your shoulders. You can just be heads down building.

Yeah, I think it's I think it's hugually important.

And I do you think right there there is it seems like there's all some more more work to be done there. I mean, I'm sure the Senate's gonna have some sent change it is, and they'll be you know, iterations.

But I am optimistic like you are.

I think I think we'll see you know, positive momentum resume here in the fall when they kind of come back and uh so super encouraged by I think, what can actually get done, you know here in the balance of the year, and then what it means for the industry because we've got the framework for stable coins as

So very much looking forward to that. I'll just be a continued, you know, kind of tailwind I think for the industry.

Oh, absolutely all loves to get your perspective on you

What are you thinking about? Are you paying.

Attention to it? You know, your your fellow competitors are doing and is in a race? You know, do you feel the same way? From my outside view looks that way, But how do you feel about it?

Yeah, I mean, the the first thing that pops in my mind is, I mean one of the benefits of of kind of being at the at the cutting edge of still a small industry is you know, it's it's so much more collaborative, I'd say, then it feels so much.

More collaborative than competitive. You know.

So my my peers at at you know, at all of our kind of you know, peer firms, you know, like we're all trying to kind of push the industry forward together, right, and and a lot of times we are talking to the same clients and we're doing it, you know, globally, and so often you know, I'm in a room and I'm not even like pitching product, right, and I'm just educating about what, you know, what blockchains can do, what digital assets are, you know, how we

An education, right.

And then you know my peers are doing doing that as well. And it is a nuanced technical industry. It's still nascent, and so I think all this education is super important.

Right.

You kind of need to hear it a few different times in a few different ways and have that kind of surround sound and and then you kind of need to see it have the Lendy effect and kind of make it through a few cycles before you can start to wrap your head around and get comfortable.

With it and that sort of thing.

So on the on the one hand, if it sometimes feels you know competitive looking at you know, flows or whatnot, but the but really it is much more I think collaborate.

A lot of the time.

We're on the same panels as each other. Again, we're talking on the same clients and you know, around the world. And uh, and I think in terms of product too, right, you know, people are everybody's in and so I think that's like the great thing, right, So that's my gentle I actually you maybe wanted something a little bit spicier in that, but it is quite collaborator. And I think that goes back to it's still early. You know, we're all trying to kind of move this thing forward together.

Yeah, that definitely makes sense.

So on that note, we got crypto legislation stable Cooin

Let's say that gets passed.

And look, it's going to take time for you and your competitors to hit the ground running. Fully, there's a lot of trial and error, testing, R and D and so forth. When do you think we will be at a point of maturation where it's ready for full mainstream adoption, So where the average Joe and Jane walking down the street may not be as tech savvy. You know, they're

Yeah?

I think so. Having the right regulatory frameworks is huge. And then with that extra clarity you can fill in some of the gaps that exists in the infrastructure right too, to make this as seamless as I think, where you know where your vision's going. So I think those are are some critical next steps. And then in terms of, you know, continuing to onboard new types of people and and one of the amazing things with crypto right it's it's it's not just something you buy and hold and

Its role in the portfolio.

And what's interesting, right, is what we don't think, you know necessarily bitcoin plays the same role in a portfolio that say, you know, some other digital assets. So you know, once you once you kind of figure out where it's going, what are you funding it with, and how are you sizing appropriately, what's your time horizon, and then you you make the investment, then I think you start to do more, maybe maybe round out that investment or start to kind

Part will take a little bit more time.

Twenty thirty though, Well, the cool thing about the exponential technologies is it does move quickly. But I think we'll get some good stuff done by twenty thirty for sure.

Yeah, you know, because I still see, you know, more of the infrastructure needs to be built out for like just thinking about like.

My mom and dad and yeah older.

But you know, the adoption might come through their banks because they trust the bank they store their money in, or maybe a social app they use YouTube and Facebook.

I don't know.

It's fascinating and I don't know what that's going to look like, but maybe it's through the banks because that's an institution they trust and it would fit in that a category of finance and investments.

Yeah, definitely.

And I think and I think it will be get it will become more abstracted away, right, Like if we think about who are the power DeFi users five years from now, very much right, it could be the institution give me bank exast managers and you know, actually using DeFi the most, and they're using a kind of behind the scenes you're I think you're always gonna have, you know, a strong kind of retail component who absolutely loves rolling up the sleeves and getting kind of dirty with all

Do you think that they could do it instead of the well, they can give the option of, hey, we'll do the whole DeFi set up here and earn this additional yield for you. Obviously the banks and these institutions will take a cut, but it'll be easy.

You know.

The person who's were a client or a customer of the bank would have to think about these things. They're like, you know, this is too much for me, But if the bank doesn't for me, that sounds cool.

Yeah, definitely, I mean, there's definitely part of the value proposition is simplifying this make it easy.

You know, I've heard some models where you know that you even.

Have a phone number to call, like right, like you know, it's just like, you know, what does customer service look like in a in a product that uses kind of defining the back end, you know, but but with you know, some kind of more white glove service on the front end, you know, for for whatever client you know and market. I think I think it's a design space that will

Right obviously proper oversight and controls around all this.

But I think in terms of the design space, a lot can be done and that can help onboard new users as well.

Mhm, what's on your room map?

But but what can you share and uh, what can we expect over the next six months or so?

Yeah, well, I think as a as a firm, I think, you know, kind of going back to are kind of you know, kind of to two full model of being builders in the space customers of these blockchains users, and trying to do more with our existing product lineup through you know, kind of the Benji you know, sweet so to speak, you know, maybe bringing new products into the into those kind of channels that we've built out now as well as on the on the investing side, I think,

Well I love it.

Uh you know, I followed Franklin Templeton for many years and you guys have certainly been ahead of the curve in many ways with this technology.

So I'm excited to.

See what rolls out next, and uh, you know, what have you back on talk about the new products and services and things like that. I got some wrap up

Ooh, you know, it would definitely be something in I think the video game space, as I mentioned, and that was where I first got real crypto pilled, you know, back in the Accial Infinity days and the Parallel card game. You know, before there was a game, right, people just collected the cards. I've since kind of played it with my son, who's a you know, an avid Pokemon fan.

Oh for sure. Rapid fire questions. Favorite food Korean through Korean barbecue. I love barbecue as well.

Favorite musician or.

Band Sublime and Mantociajo kind of you know, I like that genre. Nice favorite movie, Uh there I go with this Matt Damon duo of good Will Hunting and Rounders.

I good Will Hunting, I mean, just a great movie.

You know, I don't think I've ever seen Rounders. I gotta gotta check down. It's fantastic.

H and it's you know, most people get into poker, they did of my generation, either when Chris Moneymaker, you know, one of the world. Here's a poker on ESPN. The first time was tall a Lies or by watching the movie Rounders, and I got in through the movie Rounders.

I'm gonna watch it tonight. I got check it out. Favorite book, Tell Two Cities. Mm hmm.

When you're not working at Franklin templeton, what are you doing for fun?

Playing with playing with my kids. And I do like I do like poker a lot of is kind of alluded to. And I like outdoor cooking and I have four different types of barbecue grill cooker apparatus in the backyard, and I like outdoor cooking.

Well, I'm we'd there with you because I have a regular size grill. Then I just bought a griddle for outside. So about you up more outside, So we'll do it.

Christopher Pleasure chatting with you.

Love what Franklin Temple's doing in the digital asset blockchain space. Thank you so much for joining me. And like I said, I'd love to have you back on as new things are launch on your front.

Thanks Tony, take care,